Business Profitability Calculator

Profit Margin Calculator

Calculate gross profit, gross margin, operating profit, operating margin, total costs, and a simplified break-even revenue level for your business.

Business Financial Inputs

Enter your revenue and major business costs to estimate gross and operating profitability.

Results

Gross Profit

$60,000

Gross Margin

60.00%

Operating Profit

$30,000

Operating Margin

30.00%

Total Costs

$70,000

At this simplified level, revenue equal to total costs represents the break-even revenue before taxes, financing costs, and other adjustments.

Profit Margin Formula

Gross margin = gross profit ÷ revenue × 100. Operating margin = operating profit ÷ revenue × 100.

Next step

Turn pricing math into scenarios

Compare pricing scenarios, plan for target profit, and test margin changes in one workflow.

01

Calculate

Start with a focused business question and get a clear estimate.

02

Compare

Move from one answer to multiple assumptions and scenarios.

03

Plan

Save useful scenarios in your workspace and build on them later.

How to calculate profit margin

Profit margin measures how much profit remains from revenue after accounting for specified costs. Gross margin focuses on revenue after cost of goods sold, while operating margin also accounts for operating expenses.

Gross margin vs. operating margin

Gross margin can help show how efficiently a business produces or delivers what it sells. Operating margin goes further by including operating expenses such as payroll, rent, software, marketing, and other overhead included in the calculation.

Example

Suppose a business generates $100,000 in revenue, has $40,000 in cost of goods sold, and has $30,000 in operating expenses. The calculator estimates $60,000 of gross profit and $30,000 of operating profit.

What should you do after calculating your margin?

Profit margin is one part of a larger business analysis. Compare your margin with break-even requirements, evaluate potential financing costs, or test how changes in revenue and expenses could affect your business.

This calculator provides estimates based on the information you enter. Actual profitability can differ based on taxes, financing, depreciation, accounting treatment, one-time expenses, and other business factors.